Correlation Between Zimmer Holdings and American Airlines
Can any of the company-specific risk be diversified away by investing in both Zimmer Holdings and American Airlines at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Zimmer Holdings and American Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimmer Holdings and American Airlines Group, you can compare the effects of market volatilities on Zimmer Holdings and American Airlines and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zimmer Holdings with a short position of American Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimmer Holdings and American Airlines.
Diversification Opportunities for Zimmer Holdings and American Airlines
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zimmer and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zimmer Holdings and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines and Zimmer Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zimmer Holdings are associated (or correlated) with American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of Zimmer Holdings i.e., Zimmer Holdings and American Airlines go up and down completely randomly.
Pair Corralation between Zimmer Holdings and American Airlines
If you would invest (100.00) in Zimmer Holdings on December 30, 2023 and sell it today you would earn a total of 100.00 from holding Zimmer Holdings or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Zimmer Holdings vs. American Airlines Group
Performance |
Timeline |
Zimmer Holdings |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
American Airlines |
Zimmer Holdings and American Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zimmer Holdings and American Airlines
The main advantage of trading using opposite Zimmer Holdings and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimmer Holdings position performs unexpectedly, American Airlines can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Airlines will offset losses from the drop in American Airlines' long position.Zimmer Holdings vs. CanSino Biologics | Zimmer Holdings vs. Ambev SA ADR | Zimmer Holdings vs. Anheuser Busch Inbev | Zimmer Holdings vs. Marfrig Global Foods |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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